Chinese exports surge in reaction to bank policy

Chinese trade surged last month following the country’s rise in bank lending, leading economists to predict a strong increase in exports over the course of 2010.

Exports grew by 45.7 per cent in February compared to the same month in 2009 despite the lunar new year holiday, which shut down the country for several days last month.

Although global fund managers have been encouraged by some brokers to think of Chinese consumption as an attractive investment, more bearish observers believe that it will be impossible to sustain domestic demand beyond the end of government stimulus measures and bank lending growth.

The immediate prospects for growth outside China may also be fragile.

Exports may be rising strongly now, according to Mark Williams, of Capital Economics, but…

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